# Peter Orszag



Year in review: national politics in 2009 (part 1)

It took me a week longer than I anticipated, but I finally finished compiling links to Bleeding Heartland’s coverage from last year. This post and part 2, coming later today, include stories on national politics, mostly relating to Congress and Barack Obama’s administration. Diaries reviewing Iowa politics in 2009 will come soon.

One thing struck me while compiling this post: on all of the House bills I covered here during 2009, Democrats Leonard Boswell, Bruce Braley and Dave Loebsack voted the same way. That was a big change from 2007 and 2008, when Blue Dog Boswell voted with Republicans and against the majority of the Democratic caucus on many key bills.

No federal policy issue inspired more posts last year than health care reform. Rereading my earlier, guardedly hopeful pieces was depressing in light of the mess the health care reform bill has become. I was never optimistic about getting a strong public health insurance option through Congress, but I thought we had a chance to pass a very good bill. If I had anticipated the magnitude of the Democratic sellout on so many aspects of reform in addition to the public option, I wouldn’t have spent so many hours writing about this issue. I can’t say I wasn’t warned (and warned), though.

Links to stories from January through June 2009 are after the jump. Any thoughts about last year’s political events are welcome in this thread.

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Open thread on Obama's economic team

Apologies for not getting this thread posted yesterday, when President-elect Barack Obama unveiled his economic team.

On the plus side, there are no incompetent hacks in this group. I’ve heard particularly good things about Peter Orszag’s work at the Congressional Budget Office, and he will produce reliable numbers at the Office of Management and Budget.

People I respect speak quite highly of Melody Barnes, who will run Obama’s Domestic Policy Council.

Also, it’s encouraging that Obama is committed to a major stimulus bill that will focus on infrastructure investments. I’ll reserve further judgment until we see more specifics about Obama’s plans, because spending $350 billion on stuff worth doing is a lot better than spending $350 billion on boondoggles.

I also agree with Matthew Yglesias that if you’re going to throw tens of billions of dollars at the economy, high-speed rail in the Midwest would be an excellent place to start. (UPDATE: Senator John Kerry has introduced a major bill that would promote high-speed rail development across the country.)

On the down side, since I opposed the series of Wall Street bailouts we’ve been seeing this fall, I’m not thrilled to see Timothy Geithner as Treasury Secretary and Larry Summers as chief of the National Economic Council. During Bill Clinton’s presidency, I wanted economic policy to be more in the direction that Labor Secretary Robert Reich was proposing, but Clinton and now Obama are clearly favoring the approach of Clinton’s Treasury Secreatry, Robert Rubin. Almost everyone on Obama economic team has close ties to Rubin.

I think Bill Richardson will do fine at the Commerce Department, but I would have preferred to see him in a different cabinet position.

If you were one of those Obama supporters who claimed during the primaries that he would govern in a much more progressive way than Hillary Clinton, now would be a good time to rethink your views.

Meanwhile, George W. Bush’s team is taking care of one troubled financial firm after another. The latest bailout plan, for Citigroup, is a particularly bad deal for taxpayers, according to Paul Krugman (who reluctantly supported the $700 billion bailout package approved before the election).

What do you think about the team Obama is assembling to handle the economy?

UPDATE: The members of the New York Times editorial board are not wild about putting Geithner and Summers in charge:

As treasury secretary in 2000, Mr. Summers championed the law that deregulated derivatives, the financial instruments – a k a toxic assets – that have spread the financial losses from reckless lending around the globe. He refused to heed the critics who warned of dangers to come.

That law, still on the books, reinforced the false belief that markets would self-regulate. And it gave the Bush administration cover to ignore the ever-spiraling risks posed by derivatives and inadequate supervision.

Mr. Summers now will advise a president who has promised to impose rational and essential regulations on chaotic financial markets. What has he learned?

At the New York Fed, Mr. Geithner has been one of the ringmasters of this year’s serial bailouts. His involvement includes the as-yet-unexplained flip-flop in September when a read-my-lips, no-new-bailouts policy allowed Lehman Brothers to go under – only to be followed less than two days later by the even costlier bailout of the American International Group and last weekend by the bailout of Citigroup.

It is still unclear what Mr. Geithner and other policy makers knew or did not know – or what they thought they knew but didn’t – in arriving at those decisions, including who exactly is on the receiving end of the billions of dollars of taxpayer money now flooding the system.

Confidence in the system will not be restored as long as top officials fail or refuse to fully explain their actions.

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